Australian Broker Call

Ord Minnett rates AIS as Hold (3) -

Ord Minnett continues to see balance sheet risk for Aeris Resources, despite an around $30m capital raising (at a -27% discount to the share price) to fund working capital requirements.

The underwritten equity raising was via a $12.9m institutional placement, and circa $16.2m via a 1 for 4.73 pro-rata accelerated non-renounceable entitlement offer.

Given a trade payables position (of $121m at June 30) and an onerous $50m debt (at 15.5% interest) with WH Soul Pattinson ((SOL)), Ord Minnett fails to see how value can be realised without another financing event.

Hold. The target falls to 13c from 22c.

Target price is $0.13 Current Price is $0.12 Difference: $0.01
If AIS meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $0.19, suggesting upside of 75.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates ANZ as Neutral (3) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

UBS has stuck with its Neutral rating and $25 price target for ANZ Bank (we had $26 in our system).

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $25.00 Current Price is $24.18 Difference: $0.82
If ANZ meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $26.15, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates BEN as Sell (5) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

Regarding Bendigo & Adelaide Bank, UBS has kept its $7.50 price target and Sell rating intact.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $7.50 Current Price is $8.84 Difference: minus $1.34 (current price is over target).
If BEN meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.17, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates BOQ as Sell (5) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

Sell rating and $5 price target retained for Bank of Queensland.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $5.00 Current Price is $5.47 Difference: minus $0.47 (current price is over target).
If BOQ meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.60, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates BRG as Neutral (3) -

Recent industry data implies upside to Macquarie's revenue forecast for Breville Group. The broker notes the third quarter was impacted by high general inflation, increased interest rates, and geopolitical tension.

Consumers are moving to lower price points as spending power becomes further constricted, and promotional activity across retailers has increased. However, third quarter margins typically saw improvment from the second quarter as material costs and freight improved.

The Neutral rating and target price of $25.30 are retained.

Target price is $25.30 Current Price is $23.85 Difference: $1.45
If BRG meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $26.40, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates BSL as Buy (1) -

While UBS is expecting BlueScope Steel's Australian business will be loss-making in the second half, based on spot pricing, it anticipates value-adding business to provide a buffer.

The broker is estimating a -$124m loss from the domestic steelmaking business, but that this will be more than offset by a combined $217m from non-steel earnings.

While BlueScope Steel's share price has benefitted from a recent rise, UBS believes the price hasn't captured the change in steel markets. The Buy rating is retained and the target price increases to $24.00 from $19.90.

Target price is $24.00 Current Price is $20.31 Difference: $3.69
If BSL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $19.78, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates CBA as Neutral (3) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

Neutral rating and $105 price target remain unchanged for CommBank.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $105.00 Current Price is $103.33 Difference: $1.67
If CBA meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $90.20, suggesting downside of -13.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates CBO as Buy, High Risk (1) -

Shaw and Partners initiates coverage on Cobram Estate Olives, which both farms olives and produces olive oil,  with a Buy, High Risk rating and a $1.75 target.

The company markets about 80% of Australian-produced olive oil, which results in a "towering" scale advantage, according to the broker. When imports are taken into account, Cobram Estate Olives has 35% Australian retail market share.

Management executed a 12% price increases in late-2023, and further increases should offset impacts from lower olive grove yields, suggests the analyst.

Currently, there is a global shortage of olive oil after two short seasons in Spain, explains Shaw, causing European imports to push
prices higher.

Target price is $1.75 Current Price is $1.36 Difference: $0.39
If CBO meets the Shaw and Partners target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $1.69, suggesting upside of 18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates CDA as Outperform (1) -

Codan is set to acquire wireless broadcast systems integrator Wave Central for a $9.1m upfront payment, alongside a potential $12.1m in earnout payments over three years. The transaction is expected to complete on December 1.

Macquarie sees solid financial metrics and upside for Wave Central under Codan's ownership. It is expected to report $16m in revenue for 2023, with a 25% earnings margin.

The Outperform rating is retained and the target price decreases to $8.48 from $9.10.

Target price is $8.48 Current Price is $8.68 Difference: minus $0.2 (current price is over target).
If CDA meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates CLG as Buy (1) -

Shaw and Partners appears to have a new analyst, Larry Gandler, covering Close the Loop, in what is (unusually) described as an initiation of coverage. A Buy rating and 70c target are set, both in line with the prior analyst's recommendation and target.

Close the Loop is described by the broker as "one of Australia’s exciting ESG growth investments" and "a global market leader in printer cartridge recycling", which accounts for 20-25% of group revenue.

Outside of this recycling, management has demonstrated a knack for leveraging its competencies and relationships, notes the analyst. The company has expanded into growth areas such as IT asset disposition (ITAD), cosmetics and battery recycling.

Close the Loop recently acquired US-based ISP Tek (for $100m), a Hewlett Packard authorised distributor and Microsoft-registered refurbisher, which accounts for 40% of group revenue.

Target price is $0.70 Current Price is $0.34 Difference: $0.365
If CLG meets the Shaw and Partners target it will return approximately 109% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates CXO as Downgrade to Sell from Neutral (5) -

With spot pricing falling faster and further than Citi had anticipated, Core Lithium's balance sheet screens the weakest among the broker's lithium coverage. The broker warns if spot pricing trends continue, the company may need to revisit timing of capital expenditure.

The broker highlights the final investment decision for the BP33 underground project is due in the first quarter of 2024, with Core Lithium having already commited $45-50m in pre-production capital expenditure.

The rating is downgraded to Sell from Neutral and the target price decreases to 29 cents from 38 cents, with Citi preferring other producers within its coverage.

Target price is $0.29 Current Price is $0.29 Difference: $0
If CXO meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 54.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates ERD as Buy (1) -

Eroad's 1H normalised earnings (EBIT) of NZ$1.9m was a significant improvement on the -NZ$3.4m loss in the previous corresponding period, and beat Bell Potter's -NZ$0.4m forecast loss. The beat is attributed to better-than-expected revenue and a lower D&A expense.

Management reiterated FY24 guidance for revenue between NZ$175-180m, normalised earnings in the range of NZ$0-5m and a R&D spend of -NZ$30m.

The Buy rating is unchanged and the target rises to 95c from 90c.

Target price is $0.95 Current Price is $0.76 Difference: $0.19
If ERD meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates FPH as Neutral (3) -

Strong sleep apnea mask growth has seen Fisher & Paykel Healthcare deliver a better than expected first half, and exceed expectations with full year guidance. The company anticipates full year net profit of NZ$250-260m, with the second half cycling more difficult comps.

Citi notes the company remains confident in its ability to return to gross margins of 65% within four years, already reflected in FY27 consensus forecasts. The broker does, however, think it will take until FY28 for earnings margins to return to 30%.

The Neutral rating is retained and the target price increases to NZ$24.00 from NZ$22.75.

Current Price is $22.20. Target price not assessed.

Current consensus price target is $21.60, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates FPH as Neutral (3) -

A better than expected result from Fisher & Paykel Healthcare's first half, says Macquarie, with margins driving net profit 5% ahead of the broker's expectations.

First half revenue for the hospitals segment increased 11%, although cycling weak comps as Macquarie notes, while homecare revenue increased 25%, supported by both new patient growth and uptake of the Evora mask.

Despite a favourable medium to long-term outlook, Macquarie sees a lack of valuation appeal at current levels. The Neutral rating is retained and the target price increases to NZ$24.40 from NZ$23.50.

Current Price is $22.20. Target price not assessed.

Current consensus price target is $21.60, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates FPH as Equal-weight (3) -

While Fisher & Paykel Healthcare's 1H revenue was a small beat over management's guidance, the 60.5% gross profit margin was 100bps above forecasts by Morgan Stanley and consensus, partly due to easing freight rates.

Consumable sales was the key surprise, according to the broker, while there was also a 5% beat on homecare (within Hospital).

Higher interest expense was offset by lower tax expense, resulting in a profit of NZ$107m, which exceeded guidance for between NZ$95-105m, point out the analysts.

There was no change to management's FY24 revenue guidance, while first time profit guidance was for between NZ$250-260m.

Morgan Stanley's target rises to $22.19 from $21.50. Equal-weight rating. Industry view: In-line.

Target price is $22.19 Current Price is $22.20 Difference: minus $0.01 (current price is over target).
If FPH meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.60, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates FPH as Hold (3) -

First half revenue and profit for Fisher & Paykel Healthcare were both slightly in advance of management guidance, observes Ord Minnett.

Homecare mask sales grew by 28% compared to the 2H of FY23 on ongoing strong demand for the Evora full face mask, explains the broker.

Management reiterated FY24 revenue guidance and provided profit guidance of between NZ$250-260m, which implies a stronger 2H, according to the broker, in line with historical seasonality related to the North American flu season.

The Hold rating is maintained and the target rises to $21 from $20.50 largely due to the time value of money, notes Ord Minnett.

Target price is $21.00 Current Price is $22.20 Difference: minus $1.2 (current price is over target).
If FPH meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.60, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates FPH as Neutral (3) -

Post Fisher & Paykel Healthcare's interim report, UBS is of the view the company remains poised for strong EPS growth from FY25 onwards, but with the shares considered fairly valued, the rating remains Neutral.

Price target has moved up to NZ$24.15 from NZ$23.15.

Stronger than forecast Homecare revenues helped the company releasing a slightly better-than-forecast financial performance.

On the other hand, revenue from the Hospital division disappointed and forecasts for this part of the group have been pared back.

Current Price is $22.20. Target price not assessed.

Current consensus price target is $21.60, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates HDN as Add (1) -

A recent trading update by HomeCo Daily Needs REIT revealed key portfolio metrics remain stable, according to Morgans, while the development pipeline remains on track.

Positively, re-leasing spreads (the change in the per-square-foot rate between the new and expiring leases) are more than 6.5% compared to the 6% average in FY23, highlights the broker.

The Add rating is unchanged and the target eases to $1.37 from $1.39.

Target price is $1.37 Current Price is $1.13 Difference: $0.245
If HDN meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $1.31, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates HVN as Neutral (3) -

While total sales for Harvey Norman remain weak, UBS points out some improvement in the second quarter. The retailer reported like-for-like sales declines of -13.9% over the first quarter, improving to a -8.6% decline in the second quarter.

The broker also points out Harvey Norman has underperformed peers JB Hi-Fi ((JBH)) and Nick Scali ((NCK)), noting comps will get easier for the former moving ahead.

The Neutral rating and target price of $3.75 are retained.

Target price is $3.75 Current Price is $3.76 Difference: minus $0.01 (current price is over target).
If HVN meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.91, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates IKE as Downgrade to Speculative Hold from Speculative Buy (3) -

Operating expenses for ikeGPS Group were higher than Bell Potter forecast for the 1H, while lower transaction volumes resulted in a year-on-year revenue decline of -32%.

Transaction revenue slipped to NZ$3.7m from NZ$9.5m in the previous corresponding period (pcp) due to a -45% year-on-year decrease in billable poles, explain the analysts. Subscription revenues rose to NZ$5.1m compared to NZ$4.1m in the pcp.

The rating is downgraded to Speculative Hold from Speculative Buy though the broker remains constructive on the medium and longer-term opportunity. The target is reduced to 63c from 88c.

Target price is $0.63 Current Price is $0.52 Difference: $0.11
If IKE meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates MQG as Buy (1) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

Regarding Macquarie Group, UBS has kept its Buy rating and $185 price target intact.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $185.00 Current Price is $165.58 Difference: $19.42
If MQG meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $181.16, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates MRM as Initiation of coverage with Buy (1) -

There are currently favourable operating conditions prevailing in the marine services industry and Shaw and Partners believes MMA Offshore is well placed to take advantage. Research coverage is initiated with a Buy rating and $2.30 target.

Favourable conditions include higher vessel utilisation and greater output prices, explains the broker. It is thought the offshore service vessel industry will remain undersupplied for several years.

Management is focusing upon high-margin segments and asset-light businesses, notes the analyst, such as integrated solutions and subsea services.

The company has over $150m in liquidity for any potential acquisitions and/or sufficient franking credits to pay a 25c fully franked special dividend, according to Shaw.

Target price is $2.30 Current Price is $1.54 Difference: $0.76
If MRM meets the Shaw and Partners target it will return approximately 49% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates NAB as Sell (5) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

$26 price target and Sell rating retained for National Australia Bank.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $26.00 Current Price is $28.10 Difference: minus $2.1 (current price is over target).
If NAB meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.77, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates NWH as Buy (1) -

Given recent contract wins, NRW Holdings is guiding to full year revenue of at least $2.9bn, and expects earnings to be at the top end of the $175-185m guidance range. The company also upgraded its tender pipeline to $3.8bn, a significant increase from the previous $2.2bn.

As UBS points out, this still suggests a broadly flat earnings margin, suggesting some earnings upside for NRW Holdings if it can deliver on its contracted revenue pipeline.

The Buy rating and target price of $3.15 are retained.

Target price is $3.15 Current Price is $2.71 Difference: $0.44
If NWH meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates ORG as Outperform (1) -

Shipments through the Australia Pacific LNG port have been impacted by a vessel stuck at port, and Origin Energy has already reported the loss of two cargoes, but anticipates this could increase to three or four cargoes before the issue is resolved.

Macquarie estimates twelve lost days will have a -2.3% impact on Origin Energy's earnings, and a -3.9% impact on net profit. The broker expects this will lead to a flat second quarter volumes, where a quarter-on-quarter increase would typically be reported.

The Outperform rating and target price of $9.39 are retained.

Target price is $9.39 Current Price is $8.40 Difference: $0.99
If ORG meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.83, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates PPE as Add (1) -

Management at PeopleIN's recent AGM noted a more challenging operating environment, which is expected to impact earnings throughout FY24, but felt the wider downturn will be relatively short-lived, especially in the health industry.

Morgans was surprised by the level of margin degradation, and lowers its FY24 underlying earnings (EBITDA) forecast to $38.5m from $48.8m, having only just downgraded earnings expectations by circa -23% in October.

The broker’s FY24 earnings margin is now at around 3.4%, which is below the 4.8% achieved in H2 of FY23, and well adrift of the 7% margin target set by management.

The target price falls to $1.85 from $2.40, while the Add rating is unchanged

Target price is $1.85 Current Price is $1.26 Difference: $0.59
If PPE meets the Morgans target it will return approximately 47% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates SGP as Overweight (1) -

Morgan Stanley notes recent reports Stockland is an interested party in purchasing the Communites business from Lendlease ((LLC)).

Assuming book value (around $1.05bn), and the acquisition is made in Stockland's joint venture with Mitsubishi, the broker forecasts accretion for funds from operations (FFO) of 1.7% in FY25 for Stockland.

Should Stockland lift the margin for the new business to around 25% (in line with its existing business), FY25 accretion could be 7.8% (pre management fees), suggests the broker.

Overweight. Target $4.45. Industry view: In-Line.

Target price is $4.45 Current Price is $4.07 Difference: $0.38
If SGP meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.46, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates SNL as Buy (1) -

Ord Minnett is positive on the outlook for Supply Network due to robust market demand by commercial vehicle customers, supported by strong activity in all regions.

The company's 1H trading update did nothing to curb the broker's enthusiasm, with both sales and earnings exceeding expectations.

Industry tailwinds are assisiting demand, explain the analysts, such as ageing vehicle fleets and the increasing complexity of vehicles.

Management now expects sales of around $145m for the 1H, a rise of 22% on the previous corresponding period, and ahead of the analyst's $137m estimate. The target is increased to $17 from $15.80. Buy.

Target price is $17.00 Current Price is $15.75 Difference: $1.25
If SNL meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates STA as Buy, High Risk (1) -

Following the Strandline Resources AGM, where management updated on the Coburn Mineral Sands project, Shaw and Partners believes the stock will remain suspended until early-2024.

A review of operations and funding requirements continues, explain the analysts. It's felt additional capital will be needed to complete Coburn commissioning.

The Buy, High Risk rating and target price of 57 cents are retained, but are under review, notes Shaw.

Target price is $0.57 Current Price is $0.10 Difference: $0.475
If STA meets the Shaw and Partners target it will return approximately 500% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates STG as Speculative Buy (1) -

Straker's 1H results missed Ord Minnett's forecasts due to higher-than-expected operating expenditure and depreciation & amortisation (D&A) expense.

More positively, the gross margin for the half was a record and the broker notes a strong turnaround for operating cash flow. Also, management demonstrated two new AI-driven tools under development.

These positives are insufficient to ward off ongoing challenges afflicting revenue growth, limiting the analyst's enthusiasm for the near-term outlook.

The Speculative Buy rating is retained and the target price decreases to 90c from $1.00.

Target price is $0.90 Current Price is $0.54 Difference: $0.36
If STG meets the Ord Minnett target it will return approximately 67% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates TPW as Downgrade to Neutral from Buy (3) -

Citi has renewed confidence in Temple & Webster's momentum following the retailers AGM. According to the broker, momentum into the second half looks promising, not withstanding ongoing cost-of-living pressures.

The ongoing structural shift of key sales dates from December to November is a positive trend for online retailers, with consumers less confident purchasing online as they approach the holidays, signifying a structural driver for online growth.

With the share price lifting more than 30% in the last month, the rating is downgraded to Neutral from Buy and the target price increases to $7.40 from $6.50.

Target price is $7.40 Current Price is $7.39 Difference: $0.01
If TPW meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates TPW as Neutral (3) -

Temple & Webster has reported sales growth is accelerating into the second quarter, with sales up 23% year-to-date, a notable acceleration from the 16% growth reported over the first six weeks of the financial year.

According to Macquarie, second quarter growth was supported by the launch of a brand campaign in Sydney, Melbourne and Brisbane, while the four day Black Friday trading period generated $17.4m in sales.

The Neutral rating is retained and the target price increases to $7.45 from $6.70.

Target price is $7.45 Current Price is $7.39 Difference: $0.06
If TPW meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates TPW as Overweight (1) -

Following a review of Temple & Webster's AGM trading update, Morgan Stanley highlights 23% sales growth in FY24 (to November 27) is on track to exceed the consensus estimate for 15% growth in the 1H. Sales growth accelerated as FY24 progressed.

This outcome suggests to the analysts meaningful market share gains for the company in a declining overall market for furniture and homewares.

Management reaffirmed earnings (EBITDA) margin guidance for FY24 and noted $20m of the $30m buyback program is completed.

The Overweight rating and $7 target are unchanged. Industry view: In-Line.

Target price is $7.00 Current Price is $7.39 Difference: minus $0.39 (current price is over target).
If TPW meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates WBC as Sell (5) -

A general review of the recent banking results season, UBS repeats the view that "extreme levels of competition" are poised to persist into 2024.

In reference to present consensus forecasts, the broker observes analysts are projecting a continued decline in net interest margins for the sector overall, while return on equity is equally forecast to slide further.

The only change made to valuations or price targets affects Westpac; the broker's price target has gained $1 to $21, No change to the Sell rating.

On a relative basis, UBS prefers CommBank most, followed by ANZ Bank, then National Australia Bank and with Westpac ranked least preferred of the Big Four.

Target price is $21.00 Current Price is $21.15 Difference: minus $0.15 (current price is over target).
If WBC meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.55, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates WTC as Neutral (3) -

A resilient trading update from WiseTech Global in the face of weak end-market conditions, says Citi, with the company reporting softer underlying trends were offset by a weaker Australian dollar and two acquisitions.

Reflecting product release delays, the broker lowers its earnings forecasts through to FY26. It expects organic growth to accelerate to 32% in the second half of FY24, from 20% in the previous quarter, in line with new product releases and enhancements.

The Neutral rating is retained and the target price decreases to $71.75 from $73.80.

Target price is $71.75 Current Price is $66.00 Difference: $5.75
If WTC meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $76.92, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources